I'm temporarily down here, and to show my simpatico with all of you, I am looking forward to returning to Rancho del Cielo. We can't helicopter because the California sunshine is shut out today. But awaiting me up there is a wonderful gift from south of the border, from President Portillo, an Anglo-Arab horse that's waiting for me, and I'll be riding as soon as I get back up there on him.

But Senators, the Representatives, the delegates, excellencies, ambassadors, you ladies and gentlemen: I've always had a great regret that in that little school in Illinois, where I was compelled to study for a couple of years a foreign language, they did not offer Spanish. I find a great beauty in it and a great desire in that language. And my desire to speak in that was heightened several years ago when I was Governor of California, and I went on a mission to Mexico City representing the President of the United States.

I found myself addressing an audience there, and then there's the thing that any speaker hates more than anything else -- I sat down to very unenthusiastic and scattered applause. The next speaker had only heightened my pain when he, speaking in Spanish, was being interrupted frequently with the warmest kind of applause. And trying to hide my embarrassment, I clapped louder and longer than anyone else and started before anyone else each time, 'till our then-ambassador leaned over and said to me, ``I wouldn't do that if I were you; he's interpreting your speech.'' [Laughter]

This distinguished series of conferences began 21 years ago in the magnificent city of Guadalajara, Mexico. And you've often enticed each other to meet outside of the capital cities, and I applaud that practice. I'm especially pleased that this year's conference is being held in my now home State of California, in this beautiful place by the Pacific Ocean. Santa Barbara is very much a part of the historic relationship between our two peoples.

As you know, we value, as the Senator said, our candid and friendly relations with our closest neighbors. And I appreciate the efforts that you're making in this conference to build upon our good will.

I have the greatest admiration and respect for President Lopez Portillo who, I understand, addressed this conference during its meeting last year at a similarly beautiful location at Manzanillo, Mexico -- M-E-H-I-C-O -- I've learned that much. [Laughter]

During my 16 months in office, we've developed a rapport fitting good neighbors and good friends. President Lopez Portillo and I have met a total of four times last year. Mexican and United States Cabinet members have exchanged frequent visits, and Secretaries Haig and Castaneda are on such cordial terms that they call each other ``Al'' and ``Jorge,'' even when debating fine points on our respective approaches to Central America's problems. You know, in the world of diplomacy, most diplomats forget they have first names.

And while occasionally there are differences in approach between our two countries, the honest good will which exists between us has ensured the maintenance of dialog and created new opportunities for cooperation. After all, we strive to achieve the same goal: a free and prosperous America -- North, South, and Central.

Mexico, along with Venezuela, took the lead in furthering economic and social development among the Caribbean Basin States. Your use of oil has demonstrated a tangible commitment to this end. We're pleased to be working together with you and other nations in this area toward a more prosperous and politically stable hemisphere.

Much has been accomplished on our agenda of bilateral issues. Last June, President Lopez Portillo and I set up two groups -- a binational commission, headed by our two Foreign Secretaries, and a cabinet-level joint trade commission. No miracle cures were expected on the issues which these two bodies have addressed, but their deliberations have helped us to focus more clearly on the issues and the opportunities before us.

Apart from some technical impediments being addressed in the Joint Trade Commission, trade moves largely unhindered. In fact, it is at an all-time high. Mexico now ranks as the United States third largest trading partner; total two-way trade should reach $35 billion in 1982.

Ongoing cooperation continues in many areas, ranging from our joint efforts in science and technology and cultural exchange, to urban development planning and developmental* (FOOTNOTE) cooperation along our 2,000-mile-long unarmed border.

(FOOTNOTE) *Environmental [White House correction.]

As is inevitable between two close neighbors, there are problems to be worked out. But by dealing with each other in good faith, by working together and consulting on these problems, we have demonstrated that they are opportunities as much as they are obstacles.

We share an understanding of the enormous benefits that we can derive from a positive bilateral relationship. I can honestly tell you that relations between the United States and Mexico are good. The friendship between our peoples is excellent. Our national legislatures have a significant role to play in our relations. I look forward to working with all of you for the benefit of both our peoples and for the peace and progress of this hemisphere.

I know the bloodshed that is taking place around the Falkland Islands is of deep concern to every nation in this hemisphere. We understand and are sensitive to Latin American sympathies in this crisis, something which made our own decisions more painful and difficult. I hope you will also, as neighbors and friends, do your utmost to understand the importance we attach to the principle that armed force should not be used to assert claims in an international dispute, as contained in Resolution 502 of the U.N. Security Council.

Let's make certain that emotions don't blur the truth of how close we really are during this tragic conflict. We all did our best to prevent bloodshed. Now that hostilities have started, we are united in the desire for a negotiated settlement and a peaceful resolution of the dispute under the guidelines set down in U.N. Security Council Resolution 502.

For our part, we'll continue to push for the resumption of negotiations. The essential issues of sovereignty must be addressed, but this is a matter for the British and the Argentinians to decide for themselves, peacefully.

In times like these, meetings like this one of today are even more significant because they serve to reaffirm the common goals and the shared values that bind us together as friends and neighbors.

I wish you all the best in your deliberations here in Santa Barbara. Bless you all in what you're doing. Thank you for picking this place. Thank you.

Note: The President spoke at 10:20 a.m. in the Loggia Ballroom at the Biltmore Hotel. Senator Charles H. Percy was the U.S. Senate delegation chairman.